The Ramsey Show - App - Teamwork is the Secret of Success in Money & Marriage (Hour 1)

Episode Date: February 1, 2019

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🎵 🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where dad is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. We're glad you're here. Open phones at 888-825-5225. That's 888-825-5225. Josh starts off this hour in Myrtle Beach, South Carolina. Hi, Josh. How are you? Hey, Dave. Thanks for taking my call. Sure. What's up?

My wife and I are just curious. We're investing in the right areas of what we need to be doing. We are, thanks to your teachings, debt- right areas of what we need to be doing. We are, thanks to your teachings, debt-free, including our home. Way to go. I think it's been fantastic. But currently, we use an ELP. We both fully fund a wall, and we're funding a 529 for our 3-year-old. The rest of our investments, we're putting in our 401ks at work.

Okay. our investments we're putting in our 401ks at work. My question is, my wife's question is, should we back that amount down to just the batch portion that our companies offer and do the remainder of the investings with the ELP? My concern is everything we're putting in won't be available until retirement. I didn't know sort of which way you would recommend it going. Gotcha. So what's your household income? $260,000 last year. Way to go. Well done. And, well, with that, I mean, you're limited.

You're both working with 401K companies, right? That's correct. So that's $36,000, $18,000 each, right? Mm-hmm. Yes, sir. And then a couple of Roths each is another $11,000, 18 each, right? Yes, sir. And then a couple of Roths each is another 11, so we're only at 47,000 out of 250,000. So you can max out everything and still do some investing.

You don't have a house payment. Right. I don't know why you'd have to back down on your 401K to be able to throw another 20 or 30 grand in mutual funds. Well, I guess the question was, and we were discussing the other night, and my wife seemed to think that she remembered from the class that the recommendation was just do whatever the match was with the 401K and then put more over with our ELP because there's more diversity

and he can do more things with it. No, that would be to do a Roth. If you're not doing a Roth, I'd do the match with a 401K, then I would do the Roth, and then if there was more left over, to get to 15%, I would go back to the 401K. There was never a recommendation in the class to go on. Now, at baby step seven, when you've maxed out everything, then yes, I would go over to your ELP, to your SmartVestor Pro, and do that. So you said you make $260,000, so 15% of that is $39,000, $36,000.

Okay, so you are up over 15% if you're maxing out everything, because you've got $36,000 and then $11,000, so you're at 47. And then we do another $6,000 and a 529 for our 3-year-old. Yeah, yeah. That's kind of outside this equation, though. I'm looking at the 15% of your income going into retirement at Baby Step 4, but really at Baby Step 7, what we say to do is max out all of your retirement options, keeping the government's hands off of as much as possible, and then to your concern of, I may want some money prior to 59 1⁄2,

I would just do additional investing. But you don't have a house payment. You should have disposable income with your fabulous income. Congratulations. You guys are killing it, man. Well done. Thank you very much. So, yeah, I would not back down on the 401K, but I would look to start doing some additional investing in non-retirement

so I could get to it later. Okay. How old are you? I'm 40. Okay. So you've got 19 years before you can access this, and you might want to access some of it in 10 years. So, yeah, I'm probably going to look for another 20 grand or so a year and start throwing that into some mutual funds over at the smart

investor pro and then go from there um and i think you've got the room to do that you should have i mean again mainly because you just have this outlandishly wonderful income that you've obviously owned uh obviously earned, I mean. So very well done. Aaron is with us in Atlanta, Georgia. Hi, Aaron. How are you? I'm good, Dave. How are you?

Better than I deserve. What's up? So I have a question. I owe $15,000 on my Honda Accord. It's actually my first payment due today. And I was wondering your opinion on how I should go about paying it off. I have about $60,000 in savings, and I make $100,000 a year. So why didn't you just pay cash for the car?

Because I currently get paid under the table and i wanted to to just you know try to make some payments and just pay it off within like a year i work construction with my family yeah but why does that mean you need a car loan um i mean that's just how i went about it i didn't really think to just pay outright okay so just go write a check and pay it off you got sixty thousand dollars you got sixty thousand dollars cash in the bank right yeah yeah just go write a check and pay it off okay and also i drive like uh about 30 000 miles miles, like 36,000 miles a year, and I got the extended warranty plan because I drive so much.

I would cancel that and get your money back. Okay. All right. Okay, let me walk you through why I would cancel that, okay? Extended warranties, all the data that we have and the research that's done on them, says that 86% to 88% of the cost of the extended warranty, almost all of it, goes to marketing and profit. The actual coverage that it's giving you, their cost to cover the car, to the extent they're covering it, is 12% to 14% of what you paid, meaning that if you take that money and put it in the bank

and you self-insure through the car breaking down, you pay out of your pocket for whatever you need, you're going to come out ahead on average. If you don't, that warranty company is going to go broke. I see. If you don't come out ahead on average. Now, you might have the exception where your thing's up, but you got the money to buy another car if that one just falls over.

So, you know, you self-insure through that stuff. Don't give them all that profit. That's why I'm telling you to do it. So, yeah, I would cancel that and get your money back, and I would write a check and pay off the car today. And now you're debt-free. Wow, that was easy. Hey, thanks for joining us.

Open phones at 888-825-5225. How many of you know somebody who needs some of this information with money? Maybe they're struggling, or maybe they've got the potential to make a lot more wealth, build a lot more wealth than they have. You know, 78% of Americans live paycheck to paycheck. Not all of them look like it. Some of them look good, but they're broke, right? Texas people call that big hat no cattle.

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You too, sir. What's up? Well, I'm 29 years old. I've been working for a company now for about five years, straight out of college. Landed a job at this company, an internship, and kind of alone with the company up until this point. I'm expecting now my fourth, hopefully final child, and I am a bit stuck as to what I should be doing as far as continuing my career. Though the company is growing, the income, in my end, has not been growing as rapidly as I thought it should.

I mean, in the past five years, I've probably grown $10,000. What do you make? $45,000 now. Okay. And what do you do? I'm an IT consultant. An IT consultant? Correct. Making $45,000?

Yeah. What's your degree in? Basically, I took a two-year course in technology and got several certifications. So how many classes and things have you done to increase your skills during the last four years in the IT field? Initially, not much, because when I started this particular job, the owner... If your last set of knowledge in IT is four years old, you're useless. The certifications are... I'm talking about your knowledge. Certifications are certifications, but I'm talking about if you're not continually growing and learning, what you learned

four years ago, you know this, is of no value, right? No. I'm constantly learning, constantly working on new systems. I'm up to date as far as knowledge of the certifications. Okay. That's what I was asking. Are you staying in the growth

curve? Because if your knowledge curve is not staying up in your world, and it's a steep knowledge curve, you're like a doc, you've got to be reading and studying all the time to stay ahead of it. Otherwise, you're dealing with four-year-old information, which you and I both know is useless. Okay, cool. All right, good. So why are you, that just seems severely underpaid. Yeah, and the reason why I called, actually, I've been trying to make a decision on this for quite some time.

I feel kind of like, I feel, it feels rude to me to try to leave the company for everything that the owner has done. I feel like I would be disrespecting him what if you you're not disrespecting him if you're if you can make 90 000 somewhere else and he's paying 45 you're not disrespecting him i i got 700 people here i would expect somebody to leave if i was paying them half a market i don't know if you're worth 90 or not. But, you know, you are disrespecting him if you leave for a thousand bucks. You know, but, you know, no raise at all. And or, you know, unless it's some kind of a promise of way up a ladder real fast. So I think what you need to do is go shopping and see what you're worth.

See if you get some offers. And that is not, that's not disrespect. Okay, what did they – did you get some offers? I have, and now two years ago, at that time I had enough, and I went out and applied, and I was making $37,000 then, and I got an offer for $56,000. When I approached him, he was first shocked. The next day we spoke about it again, and he got my level down so much where I just decided that it probably made more sense to stay.

Why did you stay at $30,000? He got you up to $45,000, right? Yeah. But you could have made $11,000 more. Yes. So I don't understand why you stayed. I guess I wasn't being loyal enough. I felt that I was a little fat.

Okay, loyalty is a two-way street, dude. I mean, you have a responsibility to your family to earn what you can earn in the marketplace. Again, if there's a tiny bit of money involved percentage-wise. Then loyalty comes into play. But, again, I would have no expectation as an owner here that someone stay here and make – I had a guy working for me 100 years ago. I mean, he was making $32,000 a year, and he learned – back in those days, he learned cold fusion. It was way back in the day. Now we don't even use that.

We use Ruby on Rails for everything and other languages, more advanced than Cold Fusion. But, you know, he got a guy, offered him 90K, and he had two little kids. And I'm like, dude, I can't pay you 90K. I'm going to help you pack your desk. You ought to take that because I love you, man. I want you to win. And I can't. I can't even come close to that.

And you go, I hate to do that to you. I hate for you to do it to me, too. But you need to. Come here. Let's get a box and pack your desk. You're going to take that $90,000 job, dude. I mean, come on. Seriously.

So, yeah, you need to get a different job. Your loyalty has become. Loyalty is a wonderful trait. I suffer from the same thing. My hillbilly DNA makes me me very very loyal to people and uh but and i have been many times in my life to the point of toxicity that i get it used against me and it becomes a toxic type of loyalty and um you know you can't you don't stay in a relationship that is not working and this one's not working uh financially you gotta go, man. You got to go make some money.

All right, Jennifer is in Detroit, Michigan. Hi, Jennifer. How are you? Hi, Dave. I'm good. How are you? Better than I deserve. What's up?

I have a question. I have been listening to you not too long, but all day long. So I have multiple sclerosis, and I just got approved for a social security disability. I have a son, so he will get benefits as well. And I'm on like baby step two. I have little over 6,000 in debt. So I'm so excited to like throw these huge snowballs at my dad. Good. With that, and I used to work at a credit union when I was in college. So my son has a 529 who, at this point, he doesn't plan on going to college.

He wants to do skilled trades. I have both Roth and traditional IRAs. Because I've had MS for so long, I don't know that I'll live to retirement age. Should I keep that money liquid for him in case if I pass or... How old are you? I am 35. Okay. And you're the only income in the household? Yes, I'm a single mom. Okay. Okay. And you're the only income in the household? Yes, I'm a single mom.

Okay. Your first goal is let's walk on through the baby steps, even in your unique, challenging situation. Still going to get you out of debt, still going to build an emergency fund, and I'm going to stop adding to any kind of long-term investing until you've done those two things, your emergency fund and your $6,000 debt's gone. Because that's going to put you in a lot better place with the peace in your finances, P-E-A-C-E, peace. Right. And I've got several friends that are battling with MS.

And the one thing they all tell me is that as stress is increased, their symptoms increase. Right, right. And so I love... So you have calmed me to give me hope that it'll be okay. Because you see there's a plan. Right. And there's something even better than a plan, and that's the plan executed. Because if you were sitting there with $10,000 in your rainy day fund and zero debt,

you would have even more peace, agreed? Correct. Which helps extend your life literally. It extends your life literally, for real. So let's do that that's a big deal and stop all investing temporarily until you do that then we come back to your second question once you've done that when you get to baby step forward do you add money into retirement with a life expectancy issue or do you just build up some money in your emergency fund, or in your separate investing? I probably would do some separate investing.

I'd love for you to have like $100,000 in a mutual fund that you've invested and grown that is not in a retirement account. Okay, and I have found an advisor who has the heart of a teacher, so I'm excited to be with him. Well, you call me back, Jennifer. Anytime you need some help, you call me back. I'll walk with you. But I think we get that financial peace in your life, and I think that'll help a lot.

So stop investing temporarily and walk your way right up into that baby step four. When you get there, I'm probably not using retirement accounts at this stage. I'm probably just going to throw it in a mutual fund so that you've got access to it, and it's liquid for you or your son, depending on who needs it. Because at 35, you're probably going to have some cash needs before 59 1⁄2. You know what I've learned after talking to so many people who have been victims of ID theft? They feel violated and they have a sense of fear and intrusion. It can be overwhelming. It's scary and infuriating at the same time.

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Go to Zander.com or call 800-356-4282. Do not wait until it's too late and you have to go through this nightmare on your own. Go to Zander.com. In the lobby of Ramsey Solutions, Sean and Haley are with us. Hey, guys, how are you? Good, Dave. How are you doing? Better than I deserve. Where are you all from? Cincinnati, Ohio.

Welcome to Nashville. So what, about a five-hour drive, huh? Seven with the newborns. Oh, seven with the babies, yeah. You add on a percentage with that. Yeah, I love it. So here to do a debt-free scream, how much have you paid off? We paid off about $60,000.

Very cool. How long did that take? Just around 20 months. Good. And your range of income during that time? About $60,000. Towards the end, kind of up to about $85,000 right now. Okay, cool.

What do you all do for a living? We're both nurses. Very good. Very good. What kind of debt was the $60,000? Nursing school? Just a little bit. My wife was a little bit more reserved on her student loans.

And there was a little bit of that. Some car loans. What else do we have? Some medical bills. We took out a loan on our house to make home improvements so we could sell it. Yeah. Okay. So how long have you guys been married?

A little over five years, coming up on six. What happened 20 months ago that said, game on, I'm getting out of debt? Tell me your story. Well, we sat down. A guy told us about a financial advisor. We sat down with him, kind of went over some numbers, and he came back at us and said, you know, how much do you guys live on? So we thought about it, and we were living way above our means, and I kind of realized it right there. And I had heard of your book before and, you know, just picked it up again and started.

And not only that, I had a little bit of health scare, and that really bothered me a lot because I needed to make sure that everything, if something did happen to me, my family was fine without me. Yeah, that'll grab your attention. For sure. Especially when you're a nurse and you know what's going on. You're like, ah! Well, that's a curse. Yeah, it really is.

It gives you extra insight that you didn't necessarily want. Wow. Well, congratulations. Very well done. So you come home after the wake-up call and you go we got to get on something here and then what happened um well it was the hardest part was getting her to uh read the book i mean she was always she'd always say it's a you know do you do what you need to do and i'll be along with the ride i'm like that's not what i need you to be on board with me

i need you to be on the same the same plan because we need to to be on the same plan because we need to both make the same decisions. So that's just really it. Just sit down, worked on a budget, and really cut a lot of stuff out of our life. So Haley, what made you decide to say, okay, I'm not going to just hand it over to him. I'm actually going to be part of the decision making. I'm going to plug in. What made you decide to do that? Once he finally convinced me to read it and started watching the debt-free screams and seeing what everybody could do. It was really a game changer for

me and having our girls and knowing that we wanted a better future for them. Okay. So the Total Money Makeover book, the YouTube debt-free screams, that gets you on the same page, gets you on a budget, gets you started, and 20 months later, here we go. Very well done.

And babies in the process. Yeah. You've got babies everywhere. How old are the babies? We have Nora, who's four, Josie, who's two, and Bennett, who is three weeks old. Oh, wow. Yeah. Baby, baby.

Yeah. Okay, just the other day. Wow. Well, very well done, you guys. Very well done. So what do you tell people the secret to paying off $60,000 worth of debt in 20 months, making 60 to 85? And having babies. Probably teamwork. You both have to be on the same page.

That's the biggest thing. Because if one's not, then obviously it's more difficult to work in the same direction. And learning to be content with what we have. Yeah. Not seeing what everyone else has, but being content with what we have. Yeah, turning off the Facebook, huh? Yeah. Yeah. Everybody else's highlight reel, as Rachel says.

Yeah. Well, very well done, you guys. Very well done. Well, we've got a copy of Chris Hogan's Retire Inspired book for you. We want that to be the next chapter in your story, that you guys become millionaires and outrageously generous as you go along. So did you have more cheerleaders or more people thinking you were insane doing this stuff? We had a few cheerleaders. Yeah.

A lot of people didn't completely understand what exactly was going on. Yeah. A lot of people don't want to make the sacrifices. That's the tough part about it. We had a bigger why and a bigger goal. That's why. Very cool. Are we going to leave baby out?

No, we'll get him in there. Get him in there. I didn't want to. You've got to have the picture moment if you come all the way from Cincinnati with the newborn, right? Three weeks old. Oh, my goodness. Way to go, Bennett. You just made the cut, buddy.

That's right. I love it. Very good. All right. $60,000 paid off in 20 months, making $60,000 to $85,000. It's Sean and Haley, Nora, Josie, and Bennett from Cincinnati. Count it down. Let's hear a debt-free scream. from Cincinnati. Count it down. Let's hear a debt-free scream.

Say it. Count it down. Three, two, one. We're debt-free! I love it. Way to go, you guys. Wow. Now, you've got a handful with a young family. The last thing you need is a bunch of debt hanging around. Well done, you guys. Wow. Now, you've got a handful with a young family.

The last thing you need is a bunch of debt hanging around. Well done, you guys. Very well done. It's good stuff. Open phones at 888-825-5225. Thanks for joining us. Allison is in Syracuse, New York. Hey, Allison, how are you?

Good. How are you? Better than I deserve. What's up? Good. How are you? Better than I deserve. What's up? Okay. So it's kind of a strange circumstance that just sort of happened yesterday. I found out that the company that I worked for was just bought by a larger corporation. Part of the agreement was that everyone would still have their same or equivalent jobs at the same pay rate, potentially more. So that didn't worry me too much, but what did is I'm seven months pregnant, and since I'm essentially going to be a new employee for a new company, I've lost my maternity benefits and everything I've read

that I've sort of lost a lot of job protection as well when I do need to go on leave. So my husband and I, we've been stockpiling cash because we're eager to start Baby Step 2 once I'm home, the baby's home, and everybody's good. But now I'm wondering that given the circumstances do we need to go to baby step three and then back to baby step two no no you'll just decide whether you're going to start your baby steps at all whether you start

your total money makeover at all so it sounds more like this um you know you pile up cash like you've been doing and if you and baby come home and everybody's fine, then let's keep piling up cash until you get back to work and can assess what's going on at the job. When you're back on the job and then you can tell that it's going to be okay and you're going to get to keep a job, then we'll go back to baby. We'll push play again. Instead of when you come home from the hospital, in this case, we we got to go back and make sure the job's secure right right so uh

first thing we're saving for is pregnancy second thing we're saving for is job loss and both are on top of you right and so we're just going to pile up we're just going to pile up cash for both but once the storm clouds clear meaning that you and baby are home that's storm cloud one the storm cloud two is you go back to work and everything's fine you got a better job making more money life is good well then you haven't skipped to baby step three you just have this pile of cash and for the first time ever you push play on your debt snowball which means we're going to throw all that cash at your debt okay at that point that'll be the does that make sense Does that make sense?

Yeah, that makes sense. It's kind of the same thing you were saying, but it's just not a baby step thing. Right. That's the difference. Now, you are aware that, you know, under your rights to hold a position under the Family Leave Act, that they have to keep the same position, at least, or an equivalent position available for you upon return. Okay.

Yeah, they're not allowed to just go, oh, you're pregnant, we don't like you anymore. That's against the law. Okay? Okay. So, I mean, we've had ladies leave here and go out on pregnancy, and when they came back, they got a similar job but a different job at the same pay, and that's completely legal. But, you know, you don't want to have this other thing going on where, you know,

they go, well, you know, we can't really hold your job for you. Yeah, you can, too. As a matter of fact, it's federal law. You better. I don't want to threaten your employer. I wouldn't do that if I were you. But I want you to know that you need to look up the Family Leave Act and understand what your rights are under that. It's there for a reason. Thanks for being with us, America.

We're glad you are here. Chris is in Atlanta, Georgia. Hey, Chris, how are you? Doing good, thank you. How are you doing? Better than I deserve. What's up? Yes, sir.

My wife and I, we're getting ready. We're under contract to purchase a new home in a better school district. My oldest daughter is getting ready to start kindergarten in a year um we have we have an excess of twenty five thousand dollars over our um six months emergency fund and we're debt free we're wondering if we should put that down on for on the mortgage or what we should do with that twenty five thousand dollars so you have your emergency fund you're debt free except the house which puts us in baby step three correct correct okay so you're putting 15 of your income into retirement that's baby step four baby step five is safe for kids college have you done anything towards kids

college not not to this point we've been saving up just to try to get them in a better school history so we haven't started they're one years a better school history. So we haven't started. They're one years old and three years old, so we haven't started that. Yeah, and what's your household income? $70,000. Okay, and you're putting the house on a 15-year fixed? No, no, sir. Okay, why?

Well, I'm getting ready to go. I'm starting full-time. I've got a real estate license and spending part-time this year if it's successful i'm planning on february next year going full-time so i'm planning to be independently employed which is a variable which means you can make more yes that's the that's the game plan. Yeah. It doesn't necessarily mean you're going to make less. I would put the house on a 15-year, and I would use the additional $25,000 as an extra down payment to make that a little easier to swallow.

Okay. And then I would just take your household income and begin to work your baby steps. And as you said, we're going to start saving for kids' college. We're going to be saving 15% of our income. Any excess money we get above those two things is baby step six. We throw it at the house and start getting the house paid off as quickly as possible. What are you paying for the house?

Well, we actually got a really good deal. The house is $325,000. We actually bought a home in 2012, so we're going to net $100,000 profit from the economy increasing and the home value. That one's under contract right now, too. So you're paying $325,000 and you're selling

yours and you're clearing $100,000 on yours to put down. And you've got $25,000 more that we're talking about you're going to put down. That's where you instill the emergency fund for six months. Still have that. Yeah. Yeah.

Even if we put the 25 down, that's where I didn't know since I was. It was a no-brainer to put it down, but since I was going to be independently employed. Yeah. In the beginning, I know it. Well, you got a six-month emergency fund. And you're not going to start real estate full-time until you've got something in the hopper, right? Exactly, not until I know that it's going to work for me. So I'm an active license right now.

Right. I just started a couple weeks ago. Yeah, well, you get some listings and some sales in the pipeline, and you don't know you're going to be able to eat. You know this is all going to work out. Then you're going to be safe. But six months is plenty. You to be able to eat, you know this is all going to work out, then you're going to be safe. But six months is plenty. You should be able to pull this off.

And you're doing this in a very wise, methodical way. You're a systems person. I can tell by talking to you, and that's a good thing. It means you're not being impulsive with this. Yeah, I would put the other 25 down, which, again, makes it easier for you to go ahead and take that leap and do that 15-year fixed, which is the only way I would do it. I would never buy a house on more than 15 years. I wouldn't buy a house unless you pay cash for it because I don't borrow money.

But I would never even recommend that you buy anything unless it's a 15-year or less fixed rate. Hey, thanks for calling in. Our question of the day comes from Blinds.com. You can upgrade your home today with Blinds.com, the number one retailer of custom window coverings. With Blinds.com, you get free samples, free shipping, and with the new promos they run every month, you're going to save even more. Always put in the promo code Ramsey, and you'll see the best possible deal out there. That's the magic word, Ramsey, at Blinds.com.

Put in Ramsey. That's the promo code, Blinds.com slash Ramsey. There you go. Today's question is from Daniel in Pennsylvania. Should I be saving money monthly for a new car while I'm paying off debt? No. Both our cars have well over 100,000 miles on them, so, and we don't want to get caught unprepared if a repair costs more than the car's value. You will.

You could. It might. But get out of debt first, get your emergency fund in place, and then start saving for your car. Get out of debt first, get your emergency fund in place, and then start saving for your car. 100,000 miles is not that big a deal on most cars. Most of them, I very seriously doubt, unless you're just driving some crappy little car, but a 100,000-mile car is not a $2,000 car in most cases. I mean, if it's destroyed in a bunch of other ways, then it could be,

but the vast majority of them got a lot of life left in them at that point. So let's not be overly dramatic about cars and put them out of order here. Cars are fine. I'm not against cars. You pay cash for them above your emergency fund and when you're debt-free. And they should be less than half your annual income when you're doing this. Maria is with us in Sacramento. Hi, Maria.

How are you? Hi, Dave. Doing well. Thank you so much for taking my call. Sure. What's up? Okay. Well, I'm in baby step two, and because of my age, I'm 55, I wanted to know if I should

stop paying into my 401K, my life insurance, and my long-term care, and if I should draw the little bit of $4,000 from my TV merit rate to pay down my debt. Yes, yes, and no. So let's walk through it, okay? You don't need long-term care insurance until you're 60. The probability of using long-term care insurance under 60 is less than 1%. And so I don't recommend long-term care insurance until you're 60, so I would stop that. I would temporarily stop retirement investing as well so that you can focus on baby step

two. I would not drop your life insurance if you need life insurance. Are you single? I am single. Okay. Do you have children? They're grown children. Why do you need life insurance?

Well, I'm starting to realize by listening to your show that I probably don't need it. I was just wanting to leave something for my grandchildren and my children. No, life insurance is not a method of building an estate. It's not economical to do that. So, no, let's drop that then, too. Okay. How much money do you have okay i mean do you have any how much money do you have in your retirement account uh about 245 good for you all right that's a good number

there i like that one all right so let's just say worst case scenario you die okay your kids can bury you and they'll still have plenty left out of 250 grand oh i didn't even think about that. So you don't need any insurance. Oh, my goodness. I never even thought about that. Thank you so much. Oh, geez.

So we're in good shape there. So we'll drop the insurance. We'll drop the long-term care insurance. We'll temporarily stop retirement. How much debt do you have not counting your home in Baby Step 2? Okay, so I have $33,000 in credit card debt. And that's want you said to make a measurable goal so my goal was to pay the thirty three thousand off by in 18 months because

you said 53 whatever the average so i'm hoping to have that paid off but then i have a car payment the balance i checked this morning is 16 000 and the car is only worth 13 so i and i love my car and it's very dependable. What's your household income? This is my house altogether. I think it's, well, my annual is $84,000, almost $85,000. You ought to be able to get out of debt faster than you've got outlined then. Okay, I just need to know how to do that because I'm doing it on paper. I did the every dollar.

I'm registered for my FPU, and I'm doing the math. You're on fire. I'm doing this, Dave. You are doing it doing this day here's what you're going to find one of two things is going on either you've used every dollar every dollar's got all these blanks to remind you to not forget to put money down for your electric bill right to not put forget to put money down But you can't put money in every one of those blanks. Nobody has that much money but God, okay? And so, you know, if you're trying to fill out every line of every dollar, you're not going to. It's just there to remind you.

Some of those lines need to have zeros in them. Like, you don't need to be saving a big pile of money for something way out in the future somewhere right now in your every dollar. So if you're getting too nitsy and too detailed that way, and you've allocated all of your income away, but if you've only got this car debt and this credit card debt, and you make $84,000 a year, I'd like to see you doing about $2,500 a month towards your debts. And you'd be out of debt in no time doing that. That's what I want to see you lean towards.

You're doing really good. You're on fire, kiddo. You call me back and let me know if I can help with details. As you keep working on this, you've got this. This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.